<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
PSB HOLDINGS, INC.
____________________
The annual meeting of shareholders of PSB Holdings, Inc. will be
held at 3:00 p.m., Tuesday, April 20, 1999 at the Peoples State Bank
Training Center, 2001 West Stewart Avenue, Wausau, Wisconsin for the
following purposes:
1. To elect 12 directors for terms which will expire at the annual
meeting of shareholders to be held in 2000; and
2. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on March 23, 1999
are entitled to notice of and to vote at the annual meeting of
shareholders and any adjournment thereof.
By Order of the Board of Directors
Gordon P. Gullickson
President
March 31, 1999
SHAREHOLDERS ARE REQUESTED TO PROMPTLY DATE, SIGN AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT THEY EXPECT
TO ATTEND THE ANNUAL MEETING. SHAREHOLDERS WHO ATTEND THE ANNUAL
MEETING AND WISH TO VOTE THEIR SHARES IN PERSON MAY DO SO BY REVOKING
THEIR PROXY AT ANY TIME PRIOR TO THE VOTING THEREOF.
PSB HOLDINGS, INC. MARCH 31, 1999
1905 W. STEWART AVENUE
WAUSAU, WISCONSIN 54401
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 20, 1999
<PAGE>
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of PSB
Holdings, Inc. (the "Company") for use at the annual meeting of
shareholders to be held on April 20, 1999, and at any adjournment
thereof (the "Annual Meeting") for the purposes set forth in the
foregoing notice.
In addition to solicitation by mail, officers, directors and
employees of the Company and its subsidiaries, none of whom will be
compensated for such services, may solicit proxies in person or by
telephone, facsimile, electronic mail or other forms of communication.
Expenses in connection with the solicitation of proxies, including the
reasonable expenses of brokers, fiduciaries and other nominees in
forwarding proxy material to beneficial owners of the Company's common
stock, will be borne by the Company.
VOTING OF PROXIES
Each holder of the Company's common stock is entitled to one vote in
person or by proxy for each share held of record on all matters to be
voted upon at the Annual Meeting. Only shareholders of record on
March 23, 1999 (the "Record Date") are entitled to notice of and to vote
at the Annual Meeting. Votes cast by proxy or in person at the Annual
Meeting will be tabulated by the Secretary of the Company.
Brokers who are the holders of record of Company common stock for
customers generally have discretionary authority to vote on certain
routine matters. However, such brokers generally will not have
authority to vote on other matters if they have not received
instructions from their customers. In determining the vote of the
shareholders on matters for which the broker does not have the authority
to vote shares held of record by the broker, the shares will be recorded
as a "broker non-vote."
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Although there is no controlling Wisconsin precedent regarding the
treatment of broker non-votes, the Company believes Wisconsin law
provides for, and the Company intends to apply, the following principles
with respect to broker non-votes and the other voting requirements for
the matters to be presented to the Annual Meeting. The discussion of
voting requirements assumes, with respect to each matter to be presented
to shareholders, that a quorum is present.
QUORUM. For purposes of determining a quorum, shareholders who are
present in person or are represented by proxy, but who abstain from
voting, are considered present and count toward the determination of the
quorum. Shares reported as broker non-votes are also considered to be
shares present for purposes of determining whether a quorum is present.
ELECTION OF DIRECTORS. Directors are elected by a plurality of the
votes cast by the shares entitled to vote. For this purpose, a
"plurality" means that the individuals receiving the largest number of
<PAGE>
votes are elected as directors, up to the maximum of twelve directors to
be chosen at the Annual Meeting. Shareholders may vote in favor of the
nominees specified on the accompanying form of proxy or may withhold
their vote as to one or more of such nominees. Shares withheld or not
otherwise voted in the election of directors (because of abstention,
broker non-vote, or otherwise) will have no effect on the election of
directors.
A shareholder who executes a proxy may revoke it at any time before
it is voted by giving written notice to the Secretary of the Company at
the Company's principal office, by filing another duly executed proxy
bearing a later date with the Secretary, or by giving oral notice to the
presiding officer at the Annual Meeting.
The persons named in the accompanying form of proxy will vote the
shares subject to each proxy. The proxy in the accompanying form will
be voted as specified by each shareholder, but if no specification is
made, each proxy will be voted:
(1) TO ELECT the 12 persons nominated by the Board of Directors to
terms of office which will expire at the annual meeting of
shareholders to be held in 2000 (see "Election of Directors");
(2) IN THE BEST JUDGMENT of those named as proxies on the enclosed
form of proxy on any other matters to properly come before the
Annual Meeting.
ELECTION OF DIRECTORS
The Company's articles of incorporation provide that the number of
directors shall be determined by resolution of the Board of Directors,
but that there shall be not less than five nor more than seventeen
directors. The number of directors within these limits is set by
resolution of the Board. Directors are elected each year to serve a
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one-year term. Members of the Board of Directors also serve as members
of the Board of Directors of the Company's subsidiary, Peoples State
Bank (the "Bank").
At the Annual Meeting, Leonard C. Britten, Gordon P. Connor,
Patrick L. Crooks, William J. Fish, George L. Geisler, Charles A.
Ghidorzi, Gordon P. Gullickson, Lawrence Hanz, Jr., Thomas R. Polzer,
William M. Reif, Thomas A. Riiser, and Eugene Witter will each be
candidates for election as a director to serve a term which will expire
at the 2000 annual meeting of shareholders. Mr. Polzer is the nephew of
Mr. Geisler. Each of the nominees has consented to serve if elected,
but in case one or more of the nominees is not a candidate at the Annual
Meeting, it is the intention of the persons designated as proxies on the
accompanying form of proxy to vote for such substitute or substitutes as
may be designated by the Board of Directors.
<PAGE>
The name, age, principal occupation or employment and other
affiliations with respect to each nominee is set forth below.
<TABLE>
<CAPTION>
Year Became a
NAME AND AGE PRINCIPAL OCCUPATION DIRECTOR OF THE COMPANY
<S> <C> <C>
Leonard C. Britten, 85 Retired, Chairman of the Board 1995
of the Bank
Gordon P. Connor, 61 Investor; President of Connor 1995
Management Corporation
Patrick L. Crooks, 64 Attorney, Crooks, Low, Connell, & 1995
Rottier, S.C.
William J. Fish, 48 Vice President of BILCO, Inc 1995
(McDonald's franchisee)
George L. Geisler, 91 President of G.L.G. Inc. 1995
Charles A. Ghidorzi, 54 President of C.A. Ghidorzi, Inc. 1997
Gordon P. Gullickson, 70 President of the Company and 1995
the Bank
Lawrence Hanz, Jr., 74 Vice President of Hanz Contractors 1995
Ready Mix
Thomas R. Polzer, 56 Vice President, Secretary and
Treasurer 1995
of M & J Sports, Inc.
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Year Became a
NAME AND AGE PRINCIPAL OCCUPATION DIRECTOR OF THE COMPANY
William M. Reif, 56 President and CEO of Wausau 1997
Coated Products, Inc.
Thomas R. Riiser, 63 President of Riiser Oil Company, Inc. 1995
Eugene Witter, 75 Witter Farm Dairy, Inc. 1995
</TABLE>
COMMITTEES AND COMPENSATION OF DIRECTORS
COMMITTEES AND MEETINGS
The Board of Directors appoints an Audit & Examining Committee. The
Board of Directors of the Bank appoints a Compensation & Pension
Committee which serves in lieu of a committee of the Company's Board of
Directors.
During 1998, Messrs. Britten, Fish, Geisler, Hanz, Polzer, Reif, and
Witter served as members of the Audit & Examining Committee. The Audit
& Examining Committee held one meeting during 1998 to review the scope
<PAGE>
of the audit engagement for the Company, the range of audit and nonaudit
fees, and bank regulatory examinations.
The Board does not have a standing nominating committee. The
functions of a nominating committee are performed by the Board which
will consider nominations for directors submitted by shareholders.
Recommendations concerning nominations with pertinent background
information should be directed to the President of the Company.
The Board has not adopted formal procedures with respect to nominee
recommendations.
The Company pays no compensation to its officers. All officers are
full-time employees of the Bank. Messrs. Britten, Connor, Crooks,
Geisler, Ghidorzi, Polzer, and Riiser served as members of the Bank's
Compensation & Pension Committee in 1998. The Committee met three times
during 1998 to review and recommend to the Board base salaries and bonus
compensation of Bank officers. See "Executive Officer Compensation."
During 1998, the Board of Directors of the Company met six times and
the Bank's Board of Directors met thirteen times. All of the directors
attended at least 75% of the aggregate number of meetings of the
respective Boards of Directors and meetings of committees of the Board
of Directors of the Bank on which they served.
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COMPENSATION OF DIRECTORS
Directors receive no compensation for service as directors of the
Company, but receive $400 for each meeting of the Board of Directors of
the Bank attended. Directors of the Bank also receive $300 for each
meeting of the Bank's Loan Committee attended and $200 for each other
committee meeting attended. Directors of the Bank are also eligible to
receive a bonus at year end in a maximum amount of $4,800. The maximum
bonus is reduced by $400 for each meeting of the Bank's Board of
Directors not attended after the first absence. During 1998, no
director received more than the standard arrangements described above.
The Bank also maintains a non-qualified retirement plan for Bank
directors. A Bank director who has served a minimum of 15 years on the
Board of the Bank is entitled to receive a retirement benefit of 50% of
the aggregate director fees and bonus received by the director during
the five year period immediately preceding his retirement from the
Board. Retirement benefits are payable in 20 quarterly installments
except that in the event of death, accrued but unpaid benefits may be
paid either in installments or in a lump sum.
BENEFICIAL OWNERSHIP OF COMMON STOCK
As of the Record Date, the Company had 883,235 shares of common
stock outstanding.
The following table sets forth, based on statements filed with the
Securities and Exchange Commission or information otherwise known to the
Company, the amount of common stock which is deemed beneficially owned
<PAGE>
as of the record date by each person known to the Company to be the
beneficial owner of more than 5% of the outstanding shares of common
stock of the Company.
<TABLE>
<CAPTION>
Shares of Bank Stock Percent of
NAME AND ADDRESS BENEFICIALLY OWNED CLASS
<S> <C> <C>
Caroline S. Mark 53,330 6.04%
2003 Ridgeview Dr.
Wausau, WI 54401
</TABLE>
The following table sets forth, based on statements filed with the
Securities and Exchange Commission or otherwise made to the Company, the
amount of common stock which is deemed beneficially owned as of the
record date by the directors, nominees to become directors, each of the
executive officers named in the summary compensation table, and all
directors and officers as a group. The amounts indicated include, as
applicable, shares held by businesses or entities controlled by the
directors and shares held indirectly, in trust or otherwise, for the
benefit of the directors and/or the director's spouse, children or other
relatives sharing the same residence.
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<TABLE>
<CAPTION>
Shares of stock Percent of
NAME BENEFICIALLY OWNED CLASS
<S> <C> <C>
Leonard C. Britten 3,680 *
Gordon P. Connor 7,265 *
Patrick L. Crooks 6,368 *
William J. Fish 5,775 *
George L. Geisler 18,964 2.15%
Charles A. Ghidorzi 0 *
Gordon P. Gullickson 6,400 *
Lawrence Hanz Jr. 44,070 4.99%
Thomas R. Polzer 595 *
William M. Reif 1,140 *
Thomas A. Riiser 8,575 *
Eugene Witter 10,000 1.13%
David K. Kopperud 335 *
Kenneth M. Selner 4,660 *
All directors and
officers as a group
(15 persons) 118,577 13.43%
<FN>
*Less than 1%
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 and regulations
of the Securities and Exchange Commission ("SEC") require the Company's
directors and officers and persons who own more than 10% of the
<PAGE>
Company's common stock ("reporting persons") to file reports of
ownership and changes in ownership with the SEC. Reporting persons are
also required by SEC regulations to furnish the Company with copies of
all section 16(a) forms filed by them with the SEC. David K. Kopperud,
who was an officer of the Company at the May 15, 1995 acquisition of the
Bank, filed his initial statement of beneficial ownership on March 23,
1999. Mr. Kopperud has not had any reportable transactions in the
Company's common stock. Based solely on a review of the copies of the
forms received by the Company or upon written representations from
certain of these reporting persons as to compliance with the section
16(a) regulations, the Company is of the opinion that for the 1998
fiscal year, all other filing requirements applicable to reporting
persons were satisfied under section 16 and SEC regulations.
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EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
No compensation is paid by the Company to any of its officers. All
executive officers of the Company are regular, full-time employees of
the Bank. The table below sets forth compensation awarded, earned or
paid by the Bank for services in all capacities during each of the three
years ended December 31, 1998, 1997 and 1996, to the Bank's Chief
Executive Officer ("CEO") and each executive officer of the Bank, other
than the CEO, as of December 31, 1998, whose total annual salary and
bonus compensation for the most recent fiscal year exceeded $100,000.
Neither the Company nor the Bank maintain a long-term compensation plan
or stock option or stock appreciation rights plan.
Summary Compensation Table
<TABLE>
<CAPTION>
Name and Other Annual All Other
Principal Position* Year Salary(1) Bonus Compensation Compensation
<S> <C> <C> <C> <C> <C>
Gordon P. Gullickson 1998 $120,000 $ 85,000 $ 0 $ 34,803(2)
President and a director 1997 $118,000 $ 83,500 $ 0 $ 35,450
1996 $115,000 $ 80,000 $ 0 $ 12,600
Kenneth M. Selner 1998 $ 76,500 $ 35,000 $ 0 $ 13,892(3)
Executive Vice President 1997 $ 74,000 $ 33,500 $ 0 $ 13,565
1996 $ 71,500 $ 32,000 $ 0 $ 2,015
David K. Kopperud 1998 $ 70,000 $ 30,000 $ 0 $ 6,735(3)
Executive Vice President
<FN>
* Position with Bank.
(1) Includes compensation deferred by participants under the
Bank's 401(k) plan.
(2) Includes contributions under the Bank's defined contribution
plans of $25,203 and directors fees of $9,600.
(3) Contributions under the Bank's defined contribution plans.
</TABLE>
<PAGE>
COMMITTEE'S AND BOARD'S REPORT ON COMPENSATION POLICIES
GENERAL
Compensation policies are administered by the Compensation & Pension
Committee of the Bank's Board of Directors (the "Compensation
Committee"). The Bank's executive compensation policies are intended to
attract and retain individuals who have experience in banking and to
provide a level of compensation which is competitive with other banks.
Although compensation data from the Wisconsin Bankers Association may be
consulted for purposes of comparison, given the disparity of size among
banks and the difficulty in drawing exact comparisons between the duties
and responsibilities of officers of other banks, the determination of
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appropriate compensation levels by the Compensation Committee is
subjective.
BASE SALARIES
Base salaries are recommended by the President and reviewed on an
annual basis by the Compensation Committee. Annual increases are
determined by the overall objective of maintaining competitive salary
levels, general factors such as the rate of inflation and individual job
performance. Individual job performance is the most important of these
criteria. The Compensation Committee, after reviewing the
recommendations of the President for salaries other than his own,
recommends base salary amounts to the full Board of Directors of the
Bank which makes the final decision with respect to all base salary and
incentive compensation matters.
INCENTIVE COMPENSATION
A significant portion of the Bank's annual compensation package is
represented by participation in the Bank's incentive bonus program.
Executive officers and all other employees of the Bank are eligible for
bonus compensation. The amount of the bonus compensation is determined
by the Board of Directors of the Bank based on the recommendations of
the Compensation Committee and the President and is completely
discretionary with the Board. Factors considered in awarding bonus
compensation are the Bank's profitability and the individual's length of
service, position held and job performance.
COMPENSATION COMMITTEE AND BOARD INTERLOCKS AND INSIDER
PARTICIPATION
No executive officer of the Company or the Bank served on the board
of directors or compensation committees of any organization whose
executive officers served on the Compensation Committee. Mr. Gullickson
is an employee of the Bank and a member of its Board of Directors, but
does not participate in the Board's formal determination of compensation
levels which are recommended by him.
<PAGE>
STOCK PRICE PERFORMANCE
Transactions in the Company's common stock are infrequent and prices
are determined by negotiation between the parties. No data regarding
the prices at which trades are made is published or otherwise publicly
available. Therefore, there is no active market which would make
meaningful comparisons to bank or financial institution stocks which are
actively traded.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
During 1998, in the ordinary course of business, directors and
officers of the Company and the Bank and many of their associates and
the firms of which they serve as directors and officers conducted
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banking transactions with the Bank. In the opinion of management, these
transactions were made on terms comparable to those which are available
to unaffiliated parties. All loans to directors and officers and to
persons or firms affiliated with directors and officers were made on
substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with
unrelated persons and did not involve more than normal risk of
collectibility or present other unfavorable features. Management of
the Company and the Bank expect that transactions such as those
described above will continue in the future.
SHAREHOLDER PROPOSALS
If any shareholder desires to submit a proposal for inclusion in the
proxy statement to be used in connection with the annual meeting of
shareholders to be held in 2000, the proposal must be in proper form and
received by the Company no later than December 1, 1999.
OTHER MATTERS
At this date, there are no other matters the Board of Directors
intends to present or has reason to believe others will present to the
Annual Meeting. If other matters now unknown to the Board of Directors
come before the meeting, the individuals named as proxies on the
accompanying form of proxy will vote in accordance with their judgment.
By Order of the Board of Directors
Gordon P. Gullickson
President
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
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